Question
OXE Corporation has an earnings per share of $5 and share price of $54. OXE decides to cut its next dividend from $5 to $2.5
OXE Corporation has an earnings per share of $5 and share price of $54. OXE decides to cut its next dividend from $5 to $2.5 per share and maintain the same new dividend payout rate. Assume that the new dividend policy does not affect the equity cost of capital. OXEs return on equity is 12%. What is the expected share price as a consequence of this decision?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
The House That Bogle Built How John Bogle And Vanguard Reinvented The Mutual Fund Industry
Authors: Lewis Braham
1st Edition
0071749063,0071751157
